01/06/15 -- EU grains closed with decent some pretty gains to start the week and the new month.

At the finish old crop Jul 15 London wheat was up GBP2.10/tonne at GBP112.20/tonne, new crop Nov 15 was GBP3.05/tonne higher at GBP122.50/tonne, Sep 15 Paris wheat finished EUR4.75/tonne higher at EUR180.75/tonne, Jun 15 Paris corn was up EUR2.50/tonne at EUR154.00/tonne, whilst Aug 15 Paris rapeseed was jumped EUR10.75/tonne to close at EUR376.50/tonne.

The reason for today's sharply higher bounce is difficult to explain, except for the fact that fund money held a record large short in agri-commodities according to the latest Commitment of Traders report released on Friday night, leaving the market vulnerable to a sudden and unexpected upside correction.

Ukraine's Space Research Institute (SRI/NAS) said that winter wheat yields there would fall anywhere between 5-38% this year, with mean figure of 20% - an estimate agreed with by independent consultant Mike Lee, who added that losses this year could be even higher.

Official Ag Ministry pontifications and forecasts continue to paint a relatively rosy picture, as do those out of Russia. Mike kicks off his second crop tour of Russia and Ukraine at the beginning of next week. He says that he's hoping that winter wheat will be far enough on so that he can see ears and start to make some yield assessment.

The Russian Ag Ministry meanwhile say that spring grains have now been planted on 27.2 million ha, or approaching 88% of the forecast area. Spring wheat planting is 87% done, with spring barley 88% sown and almost 94% of the corn area now seeded, they say.

APK Inform said that Russian seaports exported 185.9 TMT of grains last week, up from 112.3 TMT the previous week. Wheat accounted for 64% (119.6 TMT) of that volume, with corn 22% and barley 12%.

Russian's shipments since the export duty on wheat was abolished on May 15 (to May 27) stand at 682 TMT, including 411 TMT of wheat, 154 TMT of corn and 105 TMT of barley.

That takes Russia's season to date grain export total to 28.75 MMT, an increase of 18% year on year. Wheat exports are 20.49 MMT versus 17.81 MMT a year ago.

On Friday Russia announced the slightly complicated details of the new wheat export duty, which comes into force on Jul 1. This will be set at a minimum of RUB50/tonne (around one US dollar) providing that prices remain below RUB11,000 (around $210/tonne). If prices move above that level then the duty applicable moves up sharply.

Rusagrotrans said to Bloomberg that "we didn’t expect the tax mechanism would be so stiff" and suggested that exporters need to step up their activity between now and Jul 1 as "the levy may increase beyond the minimum level toward autumn."

APK Inform said that Ukraine seaports had exported almost 421 TMT of grains last week, a small reduction on the near 503 TMT shipped out the previous week. The largest recipient was Egypt taking 67.6 TMT followed by China with 52.5 TMT.

Tunisia said that it's 2015 grain harvest will only total 1.4 MMT, a 39% decline on a year ago, due to drought. The country will need to import 2.3 MMT of grain in 2015/16, said their Ag Ministry.

EU rapeseed prices moved sharply higher for a second day, on ideas that the 2015 global crop might not be as high as some early season estimates indicated. The IGC estimated Canada's 2015 canola crop at 14.9 MMT late last week versus an Oil World forecast of 16 MMT.

The IGC peg the EU-28 rapeseed crop at 21.9 MMT, the same figure currently being used by French analysts Strategie Grains. The USDA are at 21.6 MMT versus 24.3 MMT a year ago, that's some 3.25 MMT below projected demand in Europe in 2015/16.

There's some talk that all of those EU production estimates could ultimately prove to be too high still, as plantings were cut back more than official estimates suggest (seen down only 3.1% by the USDA for example).

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Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
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